Managerial self-references in corporate disclosures: an analysis of MD&A
Author
Faculty Advisor
Date
2024
Keywords
business, economics, self-reference, corporate disclosure, MD&A, restatement
Abstract (summary)
This study examines strategic pronoun usage in the Management Discussion and Analysis (MD&A) section of annual reports. Through automated textual analysis of a large sample of MD&As, we find that managers of firms with higher earnings growth tend to use more self-inclusive pronouns (e.g., “we,” “us,” and “our”) and fewer self-exclusive words (e.g., “the company”). This self-referential language pattern is associated with a higher likelihood of future financial restatements. Our findings contribute to the literature on corporate narrative disclosures and identify a potential new indicator of financial misstatements. The results have implications for investors, analysts, auditors, and regulators.
Publication Information
Hao, Y., Mao, Y., & Wang, X. (2024). Managerial self-references in corporate disclosures: An analysis of MD&A. Journal of Applied Business and Economics, 26(5). https://doi.org/10.33423/jabe.v26i5.7290
Notes
Item Type
Article Post-Print
Language
Rights
All Rights Reserved